LDV in Bankruptcy After Sale Fails

APA padlock on an LDV van in Birmingham on Monday, the day the firm was placed under bankruptcy protection.��

Hundreds of workers in central England lost their jobs on Monday when British van maker LDV went into administration after GAZ Group said all rescue attempts had failed.

LDV was forced to suspend production last December after GAZ ran into funding problems. It employed 850 people at its plant in Birmingham.

"Sadly, we do not have the funding necessary to keep employees on, so it is with great regret that we place ourselves in a position where we will have to make redundant later today the vast majority of the work force," an official from administrator PriceWaterhouseCoopers told reporters.

An LDV spokesman said a further 1,200 jobs were at risk on the dealership and distribution side of the business. An estimated 4,000 more involved with supplying the company with spare parts could also be lost, he said.

GAZ called it a sad day for the LDV work force and British manufacturing. "Over the last few months, we have fought relentlessly to find a solution that would ensure jobs and manufacturing remain in Birmingham," it said in a statement. The company said it had chased a management buyout, approached numerous foreign investors, held extensive talks with the government in an attempt to secure bridging finance and attempted to secure a European Investment Bank loan.

Talks with Malaysian firm Weststar on a possible rescue package fell apart last week after it failed to find enough funding to complete the purchase.

Britain had already provided Weststar with a ?5 million ($8 million) bridging loan. But it rejected the firm's plea for another ?45-50 million on the grounds that it was up to investors to stump up the cash, the LDV spokesman said. "It's obviously the end of the line for GAZ's involvement," the spokesman said.